Ratan Tata – The Journey

Ratan Tata poses in front of the Tata “Nano” car during the launch in New Delhi on Jan. 10, 2008. View a slideshow on his corporate career here.

Ratan Tata’s two decades as chairman of Tata Sons was a period of expansion for the 144-year-old group. His appointment in 1991 came just a few months before India announced its first major liberalisation of the economy, and Mr. Tata took full advantage. Under his leadership, the group multiplied its overall sales by 43 times and also became one of the first Indian companies to make major overseas acquisitions. It bought iconic U.K. brand Jaguar-Land Rover as well as European steelmaker Corus Group PLC.

As the 75-year-old Tata patriarch hangs up his boots, India Real Time takes a look at his hits, and some misses.

Advertisement

Global Ambitions

One of Mr. Tata’s chief goals was to make his conglomerate a major player on the global stage.

Even during his last two months at the helm of Tata Sons, hotel unit Indian Hotels Co. Ltd. made a strong pitch to acquire U.S.-based Orient Express Hotels Ltd. The deal hasn’t come through yet.

2012 – Tata Global Beverages helps open India’s first Starbucks outlet as part of a joint venture.

But…

While Tata is one of India’s most well-known brands, it trails behind top Asian multinationals such as Samsung and LG Electronics.

“True globalization would require a combined resource pool, an integrated supply chain and diverse management,” says Kavil Ramachandran, the head of the research chair on family business at the Indian School of Business.

Small car, big dream

Ratan Tata said he would make a 100,000 rupee ($1,800) car and he delivered. In 2008, the first Nano — the world’s cheapest car — was revealed to the public.

This came after Tata Motors introduced the Indica — the first car truly developed and built in India.

Nano was envisioned as a safe and comfortable alternative for millions of Indian families who use motorcycles because they can’t afford a car. And sales targets were sky high.

There was a frenzy to book the Nano initially, but customers had to wait as violent protests against land acquisition forced Tata to shift its Nano plant to Gujarat from West Bengal state.

But…

Although Tata Motors has now given a renewed push to the Nano, its sales slipped early because of teething problems and reports of some cars catching fire. A perception that it was a “poor man’s car” didn’t help its sales in big cities.

Financial Services

The Tata group owned a stake in the Central Bank of India before the lender — together with 13 others — was taken over by the government in the late 1960s.

When India reopened the banking sector to private companies in the 1990s, the Tata group didn’t apply for a license.

But it formed Tata Capital, which now offers a wide range of financial products. The group also has life and general insurance ventures.

Tata Capital recently said it is considering applying for a banking permit.

New Ventures

During Mr. Ratan Tata’s tenure, the Tatas entered sectors such as housing, realty, infrastructure, retail, satellite television and power distribution.

Cancelled Flight

In 1994, the Tata group tied up with Singapore Airlines to launch a domestic carrier in India. However, their proposal was rejected by the Indian government, which said that there were enough air carriers in the country.

Tata had pioneered civil aviation in India by setting up Air India in 1932 to fly on international routes. Air India was taken over by the government in 1954. It hasn’t made a profit in recent history.

The license rejection was probably a blessing for the Tatas: All but one of India’s airlines are now deep in debt and running losses.

Earlier this month, Mr. Tata said in an interview with the Press Trust of India that he would hesitate to start an airline today because of the “destructive competition” in the sector.

Mr. Tata himself is a trained pilot and enjoys flying.

The Design

An architect by training, Mr. Tata brought “design engineering to Tata Motors, design aesthetics to Titan Watches and design as a business to [Tata unit] Ginger Hotels”, says Gita Piramal, business historian and author of Business Maharajas.

“But I believe he couldn’t take it to all his businesses. As he steps down today, it is an opportunity lost,” she says.

Mr. Tata graduated from Cornell University in 1962 with a degree in architecture and worked briefly with Los Angeles-based architecture firm Jones & Emmons before moving to the Tata group.

Telecom Test

India’s telecom sector has grown at a meteoric pace, and is now the world’s second-largest market after China.

But group company Tata Teleservices hasn’t quite been able to keep pace with its rivals, incurring losses on buying radio bandwidth and running capital-intensive operations.

The sector is now grappling with allegations of corruption and a price war.

There was a media uproar in 2010 after recordings of telephone conversations between Mr. Tata and corporate lobbyist Niraa Radia were leaked to the media. The discussion was reportedly on Ms. Radia’s efforts to help political parties get ministers appointed to the federal government.

Mr. Tata is considered by most in Indian industry to be a man of great integrity.

The Taj Attack

The Tatas run the successful Taj group of hotels, spread across India as well as abroad.

It was in the news in 2008, when on the night of Nov. 26, heavily armed militants laid siege to Mumbai.

About India Real Time

India Real Time offers analysis and insights into the broad range of developments in business, markets, the economy, politics, culture, sports, and entertainment that take place every single day in the world’s largest democracy. Regular posts from Wall Street Journal and Dow Jones Newswires reporters around the country provide a unique take on the main stories in the news, shed light on what else mattered and why, and give global readers a snapshot of what Indians have been talking about all week. You can contact the editors at indiarealtime(at)wsj(dot)com.